Practically every business on the planet sets out with the main objective of earning money. This is generally done by manufacturing some form of product, or offering a service, and then charging customers money for it. This fundamental principle is fairly straight-forward, although it contains many specific details.

First of all, it is a very rare case where a company can offer a product or service that is genuinely unique and cannot be supplied by anyone else. This means that your enterprise will be competing with other businesses that sell a similar product and you will both be trying to earn money from the same customers, who only want to spend their money once. So how can you boost the chances of them spending money with you?

Marketing is the main tool used by modern firms to draw prospective customers to do business with them and not with their competitors. It is a very broad topic that is influenced by a great deal of internal and external variables, but when done well it can be the one business practice that could make or break a company. Any time spent on marketing will reap benefits, although spending this time correctly can yield extraordinary results.

So where should you begin when constructing a marketing strategy for your own company? Well, every situation is different, and each business will have its own set of strengths and flaws that must be taken into consideration, but there is a marketing rule that can be applied to almost any company to be used as a marketing framework. It is called the “Marketing Mix”.

The Marketing Mix

The marketing mix was a term that was first coined in the 1950’s and is an expression that is used to express the fundamental building blocks of any marketing strategy. It reflects the fact that marketing is not a simple, blunt-edged business technique, but rather a subtle balance of different elements of business functions.

The term was later built upon to include the concept of “four P’s” that described the critical elements of the marketing mix. The formalisation of these P’s made it very easy for company managers and marketers to quickly associate the elements of marketing to the strengths of their own companies, and by doing so could very quickly create a personalised and efficient marketing strategy.

While we were preparing the launch for our own organic cotton sheet products we applied ideas in the marketing mix to create a plan.

Product

Although every element of the marketing mix is a necessity, the “product” element mentioned as one of the four P’s is possibly the most crucial of all. It describes the physical product or intangible service that your business will be selling, and at the end of the day it is the reason that buyers are going to spend money with you. If this element is not correctly managed then your company will find it hard to survive.

Several people don’t think that marketing has any role to play when it comes to the actual product that your business is selling. In fact, the typical train of thought very often bears the precise opposite sentiment. Surely it should be the other way around – your manufacturing department creates an item for sale and then it is the task of the marketing department to find ways to sell it, right?

Consider the computer software market as an example. There are many established brands of both operating system as well as software application products in the market already, and because the market is fairly well saturated it would be very tough (and expensive) to “take on the big boys”. So how can the principles of the marketing mix assist in this circumstance?

Rather than creating an operating system and then trying to craft a marketing strategy to rival the likes of Microsoft and Apple, it would be more effective to look at what types of product are sought after in the current marketplace, and how feasible it would be to manufacture and sell them. By being aware of the marketing mix early on in your product development cycle you can avoid business dead-ends at a later time.

Once your products have been designed and created it is still a critical skill to be able to objectively evaluate your own products to recognise the reasons that a customer would buy your product rather than a competitors’.

Another form of this part of the marketing mix is known as product variation and is generally used to either lengthen the lifecycle of a product already in the market, or to make your brand new product attractive to as many consumers as possible.

The car industry uses this approach very effectively by offering different engines, trim packages and interior options with the cars that they offer. They use the marketing mix to good effect to sell their own products in an extremely competitive marketplace. Whilst these companies may have substantial marketing budgets, the same concepts can be applied to all companies.

“Product is paramount” is one of the main mottos used in our xbox 360 steering wheel company that aims to emphasise to all staff that we expect high quality production.

Price

Another important factor in the marketing mix concerns the price of your products or services. This isn’t a simple case of performing market research to determine the highest price that your customers would spend (although that can be a handy tool to use), but rather using the price of your products as a strategic tool designed to achieve any particular targets your company has. The potential advantages of an effective pricing strategy are surprisingly large!

Although it may seem obvious, it’s still worth noting that price has always been, and probably always will be, one of the key factors that customers take into account when they are making a purchase. It is also worth noting that customers don’t constantly consider the cheapest price to be the best price. In fact a price that is too low can sometimes turn customers away.

There are many questions that you need to ask yourself when devising a good pricing strategy, key among which are the price sensitivity of your customers, what your rivals are doing and how can pricing maximise your own profits. From a strategy point of view though, pricing can be covered by two main principals; price skimming and also penetration pricing.

Price skimming

The main idea driving price skimming is to make as much money as possible from the sector of the market which is price-insensitive and will be willing to spend a premium amount of money to receive a product or service early on. Not only can this approach deliver excellent financial advantages, but it can also advertise an exclusive and high quality image of your item.

This pricing technique is frequently used in the consumer electronics market where customers will often eagerly await the release of a new mobile phone or computer games console. Makers could set nearly any price they wanted to and there would still be a loyal core of customers that would pay it. By using this method as part of a pre-ordering strategy, a company can help to smooth its own cash flow.

Penetration pricing

Penetration pricing is at the opposite end of the pricing spectrum, and is geared towards gaining a large market share at a short-term cost so that financial rewards can be earned long into the future. It can be a risky strategy, but when used correctly it can setup revenue streams for many years to come.

Yet another thing to keep in mind is that “price” is the only part of the marketing mix that will generate revenue for a business. The other members of the four P’s will all cost money to create or carry out. So it is even more vital to get your pricing strategy right.

Before our company started looking into on-line promotion relating to Amber worry beads there did not seem to be the obvious choice of keyword to use as our main focus.

Place

Place is the portion of the marketing mix that is often overlooked by companies, but it is still a significant part of selling your product effectively. In a nutshell, it describes the method in which you provide your product to your consumer, and consequently how you receive money from them.

The most common implications of place-based marketing are the physical venues in which your products are sold. For the majority of consumer products, this involves the distribution network between your production centres and retailers or other outlets around the world. Since distribution of a physical product costs money it is important to determine your own priorities and adapt your distribution network appropriately.

With the growing use of the Internet by your prospective customers, marketing techniques have had to consider how they use the Internet to help distribute their products. By using the Internet as a point of contact (or even as a complete distribution channel in download-based markets such as MP3s) firms are now able to reach out to a huge pool of possible customers.

Promotion

When you mention the word “marketing”, many people instantly think of the promotional aspect of the marketing mix, although as we have seen, this is only one branch of a more comprehensive system. Promotion can be employed on a very individual basis or as a mass communication tool, and whilst it can be a costly undertaking it is often an important one. The key concern of promotion is to deliver a certain message that will boost sales.

Advertising is one of the most typical forms of promotion. Classically it would be done by posting on billboards, producing short clips for TV and radio or by physically handing out flyers or leaflets to potential customers. With the coming of the information age we have seen a great increase in promotion via e-mail and the Internet, or just as targeted advertising materials posted through your front door.

Another important part of promotion involves branding, which will not necessarily yield more product sales directly, but goes back to one of the initial purposes of marketing; getting customers to choose your product over those of your competitors.

Putting it into Practice

As previously mentioned each company is unique and will have different marketing requirements. By using a mixture of the four P’s reviewed above you can take a good view of your own marketing strategy.